Neoliberal Kleptocracy

Neoliberal government which adopted neoliberal ideology with its belief of self-regulation market and in which no outside oversight
is possible, due to the ability of the kleptocrat(s) to personally control both the supply of public funds and the means of determining
their disbursal.

Kleptocratic elite typically treat their country's treasury
as though it were their own personal bank account, spending the funds on
luxury goods as they see fit. Many members
of kleptocratic elite (especially financial elite) also secretly transfer public funds into secret personal
numbered bank accounts
in foreign countries in order to provide them with continued luxury if/when their criminal behavior was exposed and they are forced
to leave the country.

Kleptocracy is the political regime to which countries in which the governing ideology is neoliberalism gravitate. Such incomes
constitute a form of economic rent and are therefore
easier to siphon off without causing the income itself to decrease (for example, due to
capital flight as investors pull out to escape the
high taxes levied by the kleptocrats).

A trove of data obtained by a US-based journalists’ group that details thousands of offshore accounts reveals several
instances of swindles and other financial crimes, The Washington Post newspaper reported Sunday.

Among the 4,000 US individuals listed in the records, at least 30 were American citizens accused in lawsuits or criminal
cases of fraud, money laundering or other serious financial misconduct, the report said.

They include billionaire hedge fund manager Raj Rajaratnam, who was convicted in 2011 in one of the biggest insider trading
scandals in US history, and Paul Bilzerian, who was convicted of securities fraud, the paper noted.

The report was the latest by prominent newspapers around the world which were given copies of the data for scrutiny by the
Washington-based International Consortium of Investigative Journalists.

The head of the ICIJ, Gerard Ryle, obtained the data — involving 2.5 million records of more than 120,000 companies and
trusts set up by two offshore companies operating in the British Virgin Islands and in Asia and the South Pacific — on a hard
drive after investigating a fraud and offshore haven case in Australia.

Several newspapers, including France’s Le Monde and Britain’s Guardian, have been publishing revelations based on the data.

The Washington Post’s report said the records contained information on at least 23 companies linked to an alleged $230
million tax fraud in Russia that was investigated by a Moscow-based lawyer named Sergei Magnitsky.

After Magnitsky informed Russian authorities of his findings, he was accused of fraud himself and thrown in prison, where he
died in 2009 under suspicious circumstances.

One of the companies mentioned in the records was used to set up Swiss bank accounts, into which the husband of a Russian tax
official deposited millions in cash, the paper said.

Today, there are between 50 and 60 offshore financial centers around the world holding billions of dollars at a time of
historic US deficits and budget cuts, The Washington Post said.

Groups that monitor tax issues estimate that between $8 trillion and $32 trillion in private global wealth is parked
offshore, according to the paper.

According to fraud experts, offshore bank accounts and companies are vital to those wishing to conceal complex financial
crimes.

For example, Allen Stanford, who ran a $7 billion Ponzi scheme, used a bank he controlled in Antigua, The Post noted.

And Bernard Madoff, who ran the largest Ponzi scheme in US history, used a series of offshore “feeder funds” to fuel the
growth of his scam.

The Washington Post quoted a top official in the US Justice Department’s fraud section, Paul Pelletier, as saying US owners
of offshore accounts were sometimes trying to hide money from US tax authorities, law enforcement or regulators.

“As a prosecutor, it was very difficult pursuing these people,” he said.

We live in a nation where the well connected (Jon Corzine) can pillage at leisure without fear of prosecution.

Where his former parasitical employees (like Lisa Jackson of the EPA) can be promoted into higher federal office and show
the nation true "transparency" by conducting government business via anonymous email accounts under the name of Richard Windsor.

Where David Gregory can smuggle contraband into the nations capitol, show the world he is in possession of it on national
television and have no fear of arrest or even charges brought.

A nation where, the top law enforcement officer in the land (Eric Holder) needs to have presidential protection for engaging
in international gun smuggling even as the president seeks to ban guns domestically.

It’s hard to miss these days. The headlines tell the story — repetitively. Everyone, it seems, is on
the take. The Securities and Exchange Commission has charged
Goldman Sachs with securities fraud for creating and selling “a mortgage investment that was secretly intended to fail” — and then
betting against its own customers. JPMorgan Chase which, in a pinch in 2008, happily
took taxpayer dough, just reported
$3.3 billion in profits for the first
quarter of 2010, a jump of 55% over the previous quarter. The bank set aside
$9.3 billion
in what’s called “compensation and benefits” for its employees in 2009.

Even when they lose, they win. According to James Kwak of the
Baseline Scenario website, on a deal in
which JPMorgan swallowed $880 million in losses, its bankers still
managed to walk away with up to $10 million in compensation.
As he wrote, “JPMorgan’s bankers did just fine, despite having placed a ticking time bomb on their own bank’s balance sheet.” Meanwhile,
Robert Rubin, who helped create the world that led to the 2008 financial meltdown as Treasury Secretary under Bill Clinton, then
took a top position at Citibank and made
more than $100 million
before it tanked on his watch. As economist Dean Baker
puts it, “In the fall of 2008, when
Citigroup was saved from bankruptcy with a taxpayer bailout, Rubin quietly slipped out the back door (with his money), resigning
from his position at Citigroup.” Only recently Rubin made the headlines for offering the
least apologetic (non-)apology imaginable for taking the American
people to the cleaners.

And when it comes to taking, according to
Eric Lichtblau of the New York Times, “more than 125 former Congressional aides and lawmakers are now working for financial
firms as part of a multibillion-dollar effort to shape, and often scale back, federal regulatory power.” In other words, the
regulators and their aides legislate the rules and then simply step through that infamous revolving door and pick up a handsome
check on the other side. There are, in fact, at least
11,000 well-employed registered
lobbyists in Washington today. A $3.4 billion “industry” in 2009, lobbying is definitely a field to get into, even in bad
times, and according to the
Christian Science Monitor, “when the cost of grass-roots efforts and of strategic advisers are all counted, total spending
on influencing policy in Washington approaches $9.6 billion a year.”

As for the money flowing into politics from corporate deep pockets, 2008 not only saw the first billion-dollar presidential campaign,
but at $1.7 billion, more than doubled
the 2004 campaign’s costs, and no one expects 2012 to be anything but more expensive. All this is, of course, known to anyone
who glances at the front page of a daily newspaper, but what exactly do we make of it all? What does it add up to? William
Astore, historian and TomDispatch
regular, has a suggestion, but before you start his piece, you might want to close your purse or button that back pocket with
your wallet in it. Otherwise, they could be picked bare by the time you’re done. Tom

Kleptocracy -- now, there’s a word I
was taught to associate with corrupt and exploitative governments that steal ruthlessly and relentlessly
from the people. It’s a word, in fact, that’s usually applied to flawed or failed governments in
Africa, Latin America, or the nether regions of Asia. Such governments are typically led by autocratic
strong men who shower themselves and their cronies with all the fruits of extracted wealth, whether
stolen from the people or squeezed from their country’s natural resources. It’s not a word you’re
likely to see associated with a mature republic like the United States led by disinterested public
servants and regulated by more-or-less transparent principles and processes.

In fact, when Americans today wish to critique or condemn their government, the typical epithets used
are “socialism” or “fascism.” When my conservative friends are upset, they send me emails with links to
material about
“ObamaCare” and the like. These generally warn of a future socialist takeover of the private realm
by an intrusive, power-hungry government. When my progressive friends are upset, they send me emails
with links pointing to an incipient
fascist takeover of our public and private realms, led by that same intrusive, power-hungry
government (and, I admit it, I’m
hardly innocent
when it comes to such “what if” scenarios).

What if, however, instead of looking at where our government might be headed, we took a
closer look at where we are -- at the power-brokers who run or influence our government, at
those who are profiting and prospering from it? These are, after all, the “winners” in our American
world in terms of the power they wield and the wealth they acquire. And shouldn’t we be looking as well
at those Americans who are losing -- their jobs, their money, their homes, their healthcare, their
access to a better way of life -- and asking why?

If we were to take an honest look at America’s blasted landscape of “losers” and the far shinier,
spiffier world of “winners,” we’d have to admit that it wasn’t signs of onrushing socialism or fascism
that stood out, but of staggeringly self-aggrandizing greed and theft right in the here and now. We’d
notice our public coffers being emptied to benefit major corporations and financial institutions working
in close alliance with, and
passing on
remarkable sums of money to, the representatives of “the people.” We’d see, in a word, kleptocracy on a
scale to dazzle. We would suddenly see an almost magical disappearing act being performed, largely
without comment, right before our eyes.

Of Red Herrings and Missing Pallets of Money

Think of socialism and fascism as the red herrings of this moment or, if you’re an old time movie
fan, as Hitchcockian
MacGuffins -- in other words,
riveting distractions. Conservatives and tea partiers fear invasive government regulation and excessive
taxation, while railing against government takeovers -- even as
corporate lobbyists write our public healthcare bills to favor private interests. Similarly,
progressives rail against an emergent proto-fascist corps of private guns-for-hire,
warrantless wiretapping,
and the potential government-approved
assassination of U.S. citizens, all sanctioned by a perpetual, and apparently
open-ended, state
of war.

Yet, if this is socialism, why are private health insurers the government’s go-to guys for healthcare
coverage? If this is fascism, why haven’t the secret police rounded up tea partiers and progressive
critics as well and sent them to the lager or the gulag?

Consider
this: America is not now, nor has it often been, a hotbed of political radicalism. We have no
substantial socialist or workers’ party. (Unless you’re deluded, please don’t count the
corporate-friendly “Democrat” party here.) We have no substantial fascist party. (Unless you’re
deluded, please don’t count the cartoonish “tea partiers” here; these
predominantly white, graying, and
fairly affluent Americans seem
most worried that the jackbooted thugs will be coming for them.)

What drives America today is, in fact, business -- just as was true in the days of Calvin Coolidge.
But it’s not the fair-minded “free enterprise” system touted in those freshly revised
Texas guidelines for American history
textbooks; rather, it’s a rigged system of crony capitalism that increasingly ends in what, if we were
looking at some other country, we would recognize as an unabashed kleptocracy.

Recall, if you care to, those
pallets stacked with
hundreds of millions of dollars that the Bush administration sent to Iraq and which, Houdini-like,
simply disappeared. Think of the ever-rising cost of our wars in Iraq and Afghanistan, now
in excess of a trillion dollars, and
just whose pockets are
full,
thanks to them.

If you want to know the true state of our government and where it’s heading, follow the money (if you
can) and remain vigilant: our kleptocratic Houdinis are hard at work, seeking to make yet more money
vanish from your pockets -- and reappear in theirs.

From Each According to His Gullibility -- To Each According to His Greed

Never has the old adage my father used to repeat to me -- “the rich get richer and the poor poorer”
-- seemed fresher or truer. If you want confirmation of just where we are today, for instance, consider
this passage from a
recent piece by Tony Judt:

In 2005, 21.2 percent of U.S. national income
accrued to just 1 percent of earners. Contrast 1968, when the CEO of General Motors took home, in pay
and benefits, about sixty-six times the amount paid to a typical GM worker. Today the CEO of Wal-Mart
earns nine hundred times the wages of his average employee. Indeed, the wealth of the Wal-Mart
founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent
of the U.S. population: 120 million people.

Wealth concentration is only one aspect of our increasingly kleptocratic system.
War profiteering by
corporations (however well disguised as heartfelt support for our heroic warfighters) is another.
Meanwhile, retired senior military officers typically
line up to cash in
on the kleptocratic equivalent of welfare, peddling their “expertise” in return for
impressive
corporate and Pentagon payouts that supplement their six-figure pensions. Even that putative champion
of the Carhartt-wearing common folk, Sarah Palin, pocketed a cool
$12 million
last year without putting the slightest dent in her populist bona fides.

Based on such stories, now legion, perhaps we should rewrite George Orwell’s famous tagline from
Animal Farm as: All animals are equal, but a few are so much more equal than others.

And who are those “more equal” citizens? Certainly, major corporations, which now enjoy a kind of
political
citizenship
and the largesse of a federal government eager to rescue them from their financial mistakes, especially
when they’re
judged “too big to fail.” In raiding
the U.S. Treasury,
big banks and investment firms, shamelessly ready to
jack up
executive pay and bonuses even after accepting billions in taxpayer-funded bailouts, arguably outgun
militarized multinationals in the conquest of the public realm and the extraction of our wealth for
their benefit.

Such kleptocratic outfits are, of course, abetted by thousands of lobbyists and by politicians who
thrive off corporate campaign contributions. Indeed, many of our more prominent public servants have
proved expert at spinning through the
revolving
door into the private sector. Even ex-politicians who prefer to be seen as sympathetic to the
little guy like former House Majority Leader
Dick
Gephardt eagerly cash in.

I’m Shocked, Shocked, to Find Profiteering Going on Here

An old Roman maxim enjoins us to “let justice be done, though the heavens fall.” Within our
kleptocracy, the prevailing attitude is an insouciant “We’ll get ours, though the heavens fall.” This
mindset marks the decline of our polity. A spirit of shared sacrifice, dismissed as hopelessly naïve,
has been replaced by a form of tribalized privatization in which insiders find ways to profit no matter
what.

Is it any surprise then that, in seeking to export our form of government to Iraq and Afghanistan,
we’ve produced not two model democracies, but two emerging kleptocracies, fueled respectively by oil and
opium?

When we confront corruption in
Iraq or
Afghanistan,
are we not like the police chief in the classic movie Casablanca who is
shocked, shocked to find gambling going on at
Rick’s Café, even as he accepts his winnings?

Why then do we bother to feign shock when Iraqi and Afghan elites, a tiny minority, seek to enrich
themselves at the expense of the majority?

Shouldn’t we be flattered? Imitation, after all, is the sincerest form of flattery. Isn’t it?

William J. Astore is a
TomDispatch
regular; he teaches History at the Pennsylvania College of Technology and served in the Air Force
for 20 years, retiring as a lieutenant colonel. He may be reached at
wjastore@gmail.com.

Great article, great read, if Americans is to truly learn and understand, in order that we
can be awaken, everyone need to take classes and courses in International Relations,
Comparative Politics and Conflict Resolution. In doing so, one would be able to compare
goverments and political systems and see that the US is currently where Russia was before
Putin. There is a plutocracy, oligarchical system in the US. They have fleece Americans and
now are doing so with the treasury. The system of taxation without any representation lives,
the current teab partying tea baggers are indeed white rich and ignorantly stupid, no clue
at all, or if they have a clue are working for their corporate cabal and they are then the
lackeys. I enjoy reading this piece, great timing, I have emailed it to a few friends, I
hope it catches on, because we are in a fights currently against the same slave owners and
their system of merciletialism. The election of OBAMA wasn't planned it happened and now
they want us to believe he is a socialist, facist, when all along they are the ones who take
over 6 thrillion dollars and plunge the economy. Americans, got stuck with the bill, the
truth is we need to raise taxes on all Americans making 1 million or more. 10 million
Americans holds 98% of the nations wealth! NO HOPE, except a Revolution of the minds!

11:45 AM on 04/24/2010
“The system of taxation without any representation lives” ~ SPQR1775

You make a very excellent point.

Congress is virtually bought and sold in our “free market” and they then vote according to
the highest bidder - capitalism at its finest. Voting by the people, therefore, has become
basically meaningless - nothing more than a quaint, futile exercise in “democracy”, a
nostalgic tradition giving us the illusion that we have real choices and a voice.

Nothing could be further from the truth. Seeing as Congress is bought and paid for with
cold, hard cash, our “votes” are worthless. We will never have enough currency to play with
the big dogs. Piggy banks can never compete with vaults. Our democracy has become a massive
sham.

Our representatives no longer speak for us, even as they pretend to listen to our concerns
and demands - they represent, speak for and aggressively promote their benefactors’ special
interests. We are indeed being taxed without true representation.

We have been made voiceless by default, even as we are still expected to hand over a blank
check.

But we remember the last time that tyrannical crap happened...1776.

America’s Neo-Aristocracy ignores our rebellious history at their peril.
gmb007: “The system of taxation without any representation lives” ~ SPQR1775

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The opening poem of the Tale of the Heike goes something like this:The sound of the bell of Gionshoja echoes the impermanence of all things.The hue of the flowering of the teak tree declares that they who flourish will be brought low.Yay, the proud ones are but for a moment, Like an evening dream in springtime.The mighty are destroyed in tne end.They are as dust before the wind.The American kleptocracy is very young and has begun it's career like the Ebola virus. It
devastated its host too quickly to provide for itself for many generations. This is not a nation
of serfs. We will fight back.

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What are you not getting about the definition of "fascism"? Look at the Wiki
http://en.wikipedia.org/wiki/Fascism. Fascism is the government structuring itself to serve
corporate interests. I don't like the Tea Partiers any more than you do. They demonstrate rank
ignorance, hollering "Keep the government's [expletive] hands off my Medicare" and other
non-sense chants. They think the national debt to be unpayable even though it is less than it
was in 1950 in real GDP dollars, and a simple repeal of the Bush tax cuts rapidly reduces it to
a manageable level.\

But when they say "fascism" as an expletive, they are exactly right. Government working with,
aligned with, and coopted by corporatist interests, they get it right. Like they say, even a
stopped clock is right twice a day.

Brooks_Gracie: What are you not getting about the definition of "fascism"?

Like Tea Partiers deserve comparison with a stopped clock! Clock without an hour hand is
more like it. The definition of Fascism is not as reductive as you make out.

And Tea Partiers couldn't care less about corporate power - they LIKE corporate power,
they'll defend the rights of rich people to be as rich as possible to the death, or at least
until another Republican president is elected.

"And Tea Partiers couldn't care less about corporate power - they LIKE corporate
power..."

Especially the power of the corporations they own stock in. Remember what is written in
the Bible: NO ONE CAN SERVE TWO MASTERS, and in the world of corporate investors,
PROFITS WILL ALWAYS COME BEFORE THEIR FELLOW AMERICANS.

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We have supported kleptocracies in south and central america for year. That is why they all want
to come here. There are no decent paying jobs or industry in those countries. We can look at
them and see our future if we don't wake up to what is going on.

awake108: We have supported kleptocracies in south and central america for

Oh I'm sure they have a nice little foundation or two assuaging their guilty consciences, if
they have them. If you look at the annual Forbes richest list, most of the wealthiest women
are of the Walton clan. Didn't have to do a thing! How sweet is that?

What's especially
galling about the most kleptocratic companies is that they's remaking themselves green....
eco, not money. Because eco IS money. The next time I hear Exxon/Mobil or Coca-Cola crowing
about their "environmental stewardship" I'm going to barf. Unfortunately, that would be very
soon.

In this way, they please investors, infuriate true environmentalists, and lull everyone
else into a false sense that they and we are moving in the right direction, when nothing
could be further from the truth. We're living on Planet Orwell.

Unquestionably, the more we learn about our publicly traded corporations, the more we understand
that competition has come to mean who can get by with the most abuse of the nation that granted
them the status of crown jewels -- a kind of race to the pits of ugliness, where companies
compete not with one another but together as an industry against other industries for the spoils
-- the wealth of the nation.

Similarly, in government we've come to understand that ideas of smaller government meant
abandoning citizen protections and shelling out our money and borrowed trillions to profiteers
who would cost us much more than what our formerly constrained government required -- this
appears to account for the other $4 trillion in debt beyond war costs accumulated during the
Bush era, and that doesn't even count the costs of recovering from an imploded financial system.

Ok, you got me started. It makes me feel sorry for any who have integrity and ideals -- they
will hardly be recognizable and might possibly be in danger amidst all this unfettered greed.
Yet, I know this is not who the vast majority of American people truly are.

Linda_from_Deerfield: Unquestionably, the more we learn about our publicly traded
corporations,

Good article - couple of errors in thinking -- "Consider this: America is not now, nor has it
often been, a hotbed of political radicalism. We have no substantial socialist or workers’
party." Exactly what is SEIU if it isn't a wokers party, and the ol' Gal that heads up Acorn was really
spouting off to the Young Democratic Socialists Organization the other day, saying they would
all be rounded up into camps for their socialist views (paraphrasing). And not a hotbed of
political radicalism - the country was founded on it for crying out loud. But yes, both
political sides appear to be profiteering unethically ands I do disagree with that. But it isn't
illegal, immoral, or unethical have at it - the only reason it's called greed is because we
didn't think of it first.

The key word is "substantial". We have one Socialist senator. That ain't substantial.

And the country wasn't quite as "radical" at its founding than you're making it seem.
"Radical" would've involved giving others besides white male landowners the right to vote.
Mao was radical, Lenin was radical. Che was radical. Compared to them, our Founding Fathers
were a set of fairly laid-back men with a handful of innovative ideas. They did a pretty d@mn
good job of it, but they definitely weren't radical.

I agree that corporate personhood is at the root of many current financial problems. The
question is: What is the alternative in a world so populous and interconnected? A return to
family farms worldwide? A total reliance on small businesses for all of our needs? Moreover,
there is no denying that some of our biggest advances in technology, agriculture, science, and
standard of living have in some measure come from the corporate system. I have contemplated this
problem for many years, but I just do not see a viable solution to our current situation.

Democracy is good enough for governments, its good enough for corporations. There would be a
lot less outsourcing and downsizing if American workers had a vote in how the corporations
they work for are run.

Ken_Freedom: Look up the Mondragon Corporate Collective for an alternative.
Democracy

Excellent thought provoking article. Thank you. I agree with most everything you wrote, except
the following:

"Is it any surprise then that, in seeking to export our form of government to Iraq and
Afghanistan, we’ve produced not two model democracies, but two emerging kleptocracies, fueled
respectively by oil and opium?"

I'm not sure this really an accurate representation of the history in Irag and Afghanistan. It
seems to me these countries, especially Iraq, were already rather "kleptocratic" before 2001.
But that's a minor quibble.

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